Governments should be focusing on creating growth rather than reducing debt, PIMCO’s Bill Gross said Friday.
“To [focus on reducing debt] right now is almost suicidal,” he said in an interview with Bloomberg Radio.
Gross also said he favors longer-maturity debt, and sees the Federal Reserve pushing policies that are likely to narrow the difference between short- and long-term borrowing rates as employment growth stagnates.
“We’ve advocated hard duration; that basically means something beyond five years,” Gross, manager of the world’s biggest bond fund, said in the interview. “The front end of the curve, in the U.S. at least, is inert. You have to move out into longer duration, harder duration.”
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Gross’ comments come after Friday’s weak employment report, which showed growth in the jobs market to be flat. This bolstered the view that Fed Chairman Ben Bernanke will take additional steps with quantitative easing.